Energy security

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Russia

Russia

  • Dependent on gas exports 
  • Energy rich country = vast surplus over demand 
  • Economic power due to oil and gas 
  • Super power & geopolitical influence
  • Increasing Russia's power nationally and internationally
  • Re-asserted Russia's power & influence over past Soviet States 

Gas supply - Russia's weapon?

  • 2004 - Ukraine's government changed to pro-western (capitalist). 
  • 2006 - Ukraine gas cut off by Gazprom
  • Russia x4 price & Ukraine government refuced to pay
  • Ukraine owed £770 million
  • 2008 - Gazprom cut supplies by 50% as Ukraine looked to join NATO & EU. 
  • Russia lost 1/3 demand from EU market
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Europe

Europe's dependency on Russia

  • Russia supplies 30% Europe's gas - most piped through Ukraine 15% 
  • When Gazprom shut down pipeline gas fell by 40% to Europe
  • Countries that rely on Russian gas could suffer economically if gas cut

Europe's energy security

  • Gazprom relies on income from gas exports to Europe
  • Cold War - supply was stable 
  • Gazprom helping secure Europe's pathways - bypassing Ukraine & Belarus

Nord Stream Pipeline - Baltic Sea no transit countries reducing political interference (2013 gas shipped directly to Germany). 

South Stream Pipeline - Black Sea Russia to Bulgaria

EU Nabucco Pipeline - Caspian Sea & Central Asia across Turkey 5% demand (SSP conflict)

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OPEC Nations

Organisation of Petroleum Exporting Countries

  • Formed 1960 
  • Control production & distribution of oil in oil-producing countries
  • Protect interests of oil producers
  • Saudi Arabia & UAE focusing on solar power - lower costs than oil
  • Venezuela - HEP 25% exports but drought and famine means no water to power the plants

 OPEC's role in energy supply

  • 78% world reserves 
  • 45% world crude oil 
  • 18% world natural gas 
  • 2006 - 900,000 million barrels of oil 
  • Set oil production quotas for member countries in response to economic growth rates & supply/ demand condition

Price of oil

  • Price depends on price on free market (supply and demand) & quality of oil produced 
  • Rise since 2002 due to demand from developing countries, reluctance to increase supply due to risk of price crash, reduced reserves therefore more costly to exploit & increasing demand for oil within OPEC member nations.
  • Security Premium = extra cost built into price of oil to allow for any disruption of supply - rises when geopolitical tensions are high & spare production capacity is low.
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Advantages & disadvantages of OPEC

OPEC Members:

Advantages

  • Collectively control supply therefore influence the price
  • Able to maximise profits for producers & if state owned increase GDP
  • Political power 

Disadvantages

  • High oil prices means supply must be kept relatively low therefore income is limited 

OPEC consumers

Advantages

  • Stable prices increases reliability of supply 

Disadvantages

  • Commodity traders don't control prices 
  • OPEC members always looking to sell at highest price 
  • Conflict impacts supply (mainly cost)
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USA's energy insecurity

Energy problems the US faces

  • 70% reliance on oil imports 
  • 46% oil from overseas
  • Large demand - average US households uses 11,700kWh per year
  • Oil use in every sector of economy - expensive 

Why is energy insecurity growing?

  • Increasing affluence - western lifestyle 
  • Terrorism - World Trade Centre national security threatened 
  • Middle East increase price from $60 per barrel in 2004 to $140 in 2008
  • US accepts the price due to high demand and high dependency 
  • Reserves being depleted oil 40 years left & coal 65 years left 
  • Global demand will rise by 50% by 2030

Future of US energy security

  • Organisation for economic cooperation and development - policies between former communist countries & developed industrial countries.
  • Shale gas 
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Shale gas in the US

  • 1.6% GDP in 2011
  • Reuction of nuclear pwoer 
  • Horizontal drilling & hydraulic fracturing 
  • Employment in Alaska, Louisianna & New Mexico 
  • Decentralisation of energy production - avoiding geopolitical tensions 
  • Increased domestic production - reduce dependence on imported energy 
  • Louisianna oil spill 88,000 gallons of oil - environmental damage
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UK's energy security

Coal

  • 28% UK electricity production 
  • EON plans to build 2 new coal-fired power stations to replace one old one
  • New ones will be 20% cleaner 
  • However the world development movement says these 2 power stations will still output more CO2 than Ghana
  • Carbon capture & storage - very expensive but able to remove 90% CO2 from power station emissions 

Nuclear

  • Loss of control over future energy - worries politicians 
  • All nuclear power stations closed by 2023 
  • Britain becoming increasingly reliant on imported oil & gas 

Friends of the Earth

  • UK is able to meet needs through renewables, efficiency & cleaner carbon technologies 
  • Nuclear is expensive, dangerous & radioactive waste disposal raises environmental concerns 
  • Investment focused on renewable not recyclable
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Physical factors affecting UK's energy security

Location/ Geography

  • Between Atlantic & North Sea 
  • River Severn 2nd highest tidal range in the world - 14 metres 
  • Barrage across the Severn cost £15 billion - Wales & England 5% demand 

Geology

  • UK oil, gas & coal reserves have all peaked 
  • Need to import to meet demand 
  • Shallower resources of fossil fuels almost exhausted 
  • Other difficult & expensive to extract 
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Exploiting the Arctic

Physical factors

  • USGS claims Arctic contains 25% world's unexploited oil & gas - match Saudi Arabia

Economic factors

  • BRICs demand more oil - price per barrel continues to increase
  • $70 per barrel then Arctic will be viably sound to exploit 

UN Law of the Sea Convention

  • USA (Alaska), Denmark, Norway, Russia & Canada
  • Russia keen to exploit 200 mile zone - rejected by UN 2001 
  • Decide what happens to Arctic by 2020

Lomonosov Ridge

  • Greenland & Russia 
  • Russian submarines placed flag in 2007 
  • Took geological samples to prove part of Russian continent
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Middle East energy security

Security

  • All oil=producing countries in Middle East are members of OPEC
  • 71% of 1000 billion barrels of oil reserves 
  • 83% by 2025
  • Only remaining major reservoir of oil reserves
  • All major economies depednent on Middle East - 76% Japan, 26% Western Europe & 21% USA

Security & political instability

  • Abqaiq, Saudi Arabia 
  • Only oil-producing country with excess capacity 
  • Terrorist attack Abqaiq oil-processing plant - 6.8 million barrels per day hub of 12,000 miles of oil & gas pipelines.
  • Abqaiq directly exposed - vulnerable to attack
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Oil Companies - TNCs

Exxon Mobil

  • One of the world's largest energy companies
  • Influence US government to give access to federal land - nature reserves & national forest
  • Shale gas - exploring in Gernamny - 90% imported energy 

Chevron Texaco

  • Influence on all energy issues 
  • Arctic National Wildlife Refuge Alaska - Republicans (only exploit once demand increases & deemed socially acceptable) & democrats (exploit ANWR before demand increases) 

British Petroleum

  • Outlook 2016 - 2035 
  • Gas is the fastest growing fossil fuel via US shale gas
  • Oil demand will continue to increase via Asian transport networks
  • Oil Deep Water Mexico - cost & tech challenging 2010 oil spill pollutes seabed 
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Western Europe

  • Switzerland & Germany phase out nuclear 
  • France continues to construct more nuclear power plants - 75% 
  • Tech fix - carbon capture & storage, catalitic reduction 

Closing the energy gap options

  • Shale gas - Exxon Mobil in Germany 
  • Chemical & groundwater pollution 
  • Bioethanol - increasing food costs - torilla wars 
  • Solar power - 15% Europe by 2020 
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Risks to North America's energy security

  • Growing dependence on China & India for oil imports - increasing competitive price
  • Control emissions making increasing production politically difficult 
  • Choke points in trade routes & terrorism
  • Bioethanol - importing maize & oilseed **** from Mexico - subsidies for biofule production 
  • Tortilla wars via increase in price
  • Unconventional sources - Canadian tar sands - boreal forest destruction - 5 barrles of water for 1 barrel of oil 

US Energy future

  • Organisation for economic cooperation and development - policies between former communist countries & developed industrial countries.
  • Shale gas 
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China's energy security

China's economics

  • 1989 Open Door Policy 
  • 1990's individuals able to accumulate own wealth by producign goods & services without interference of state government
  • Largest companies state-owned - profit - focus spending on education & healthcare

Energy secure

  • Biggest producer of coal in the world 
  • 70% supply from coal (electricity)
  • China holds 3% world oil reserves
  • Can afford to import oil from Middle East
  • HEP 16% supply - 3 Gorges, aim to have dams on all major rivers

Energy insecure

  • Coal - 70% supply at the moment therefore very high dependence on most heaviliy polluting fossil fuel
  • Oil - China's oil fields have reached their peak, Tarim Basin failed to attract investment due to rural western location 
  • Oil exploitation in South China Sea - conflict with Vietnam & Philippines
  • Natural gas - very expensive & difficult to build pipelines from gas fields in Western China
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Africa's energy poverty

Energy poverty = when country has insufficient acces to reliable sources of power 

Energy Poverty in Africa

  • 1.6 billion people have no access to electricity
  • 80% live in rural areas OR urban slum dwellers 
  • Biomass kills 2/5 million women & children per year 
  • Lung conditions due to smoke from stoves 
  • Limits women's engagement with education & employment 

Micro-hydro, Kenya

  • Mbuiru village 
  • Tungu-Kabri Micro-Hydro power project (UN Devlopment Programme) 
  • Small-scale - only benefits 1000 people 
  • Cheap 
  • Sustianable 
  • Light saves time & allows locals to open smal businesses - entreprenuership
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Canada's Tar sands

Tar sandsOil sands, naturally occuring mixtures of water, sand & clay - Very dense viscous form of petroleum (bitumen)

Frontier hydrocarbonsGrades of oil that are inferior to conventional sources - Bitumen VS crude

Canada's oil sands

  • 1 million barrels per day in 2003 
  • 5 million barrels per day in 2030 
  • Increasing oil prices will attracted TNCs (BP, Shell & Exxon Mobil) to invest in oil sands

Benefits of tar sands

  • Alternative source when conventional unavailable for geopolitical or physical reasons 
  • 16% North America demand for oil by 2030
  • Vital to Canada's economy 20% total exports in 2007

Costs of tar sands

  • Expensive to extract - $15 bitumen $2 crude 
  • Energy intensive - 3 barrels crude for 1 tar sands
  • Alberta Environment Institute - large source of GHG
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